The prognosis for the global chocolate market continues to deteriorate as Ghana, the second-largest producer of cocoa in the world, is considering delaying the delivery of up to 350,000 tonnes of beans until the next season as a result of bad crops, five sources told Reuters.

Due to a third year of subpar harvests in Ghana and Ivory Coast, which account for 60% of global output, cocoa has more than doubled in value this year alone. As a result, chocolate manufacturers worldwide are boosting costs for customers.

Prior to this, the market projected that Ghana would roll forward around 250,000 metric tonnes of cocoa, or almost half of its current crop. Ghana’s cocoa regulatory body, Cocobod, stated that the nation was trying to roll over “some volumes, but not in those (350,000 tonne) quantities”.

Unfavourable weather, bean diseases, and illicit gold mining—which frequently uproots cocoa farms—have devastated the nation’s cocoa harvest.

The small crop that is available for delivery in Ghana is being further depleted by Ghanaian farmers who are smuggling additional beans to adjacent countries where they may sell them for more money than the official purchase price.

Ghana pre-sold about 785,000 tonnes of beans for the current 2023–2024 (October–September) season, according to five people with knowledge of the situation. However, it is expected that Ghana will only be able to supply about 435,000 tonnes.

Ghana typically sells between 750,000 and 850,000 tonnes of its crop, or around 80% of it, one year ahead of schedule.

But last season’s yield dropped to about 670,000 tonnes, and this season’s crop isn’t predicted to grow to more than 500,000 tonnes.

The industry and traders worry that it could not improve much the next season either.

According to the International Cocoa Organisation, this season’s worldwide cocoa production is expected to decrease by 10.9% to 4.45 million tonnes.

Because of this, chocolate manufacturers and processors will need to use their supplies of cocoa to meet their whole demand.

A well-established system for the trading of cocoa is being undermined by the price increase.

Ghanaian authorities determine the lowest price at which traders can buy cocoa from farmers for the upcoming season by averaging their advance sales.

Ghana is having trouble with forward sales for the following season since some 350,000 tonnes of forward sold beans are missing from this season’s harvest, according to merchants. According to two reports, the nation has only exported 100,000 tonnes.

Cocobod will find it difficult to raise farmer prices next season based on these sales, since sources claim that the 100,000 tonnes and the 350,000 tonnes that will be carried over into the following season were sold for less than half of the current global cocoa prices.

Although Cocobod refrained from disclosing quantities or pricing, he stated that forward sales were proceeding as normal.

According to the sources, if prices don’t rise, farmers will probably be enticed to increase bean smuggling, plant other crops, or sell more of their land to gold miners.

(Adapted from Reuters.com)

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